On November 17, 2025, the SEC’s Division of Corporation Finance (the SEC) announced a significant change in its approach to no-action requests for public companies to exclude shareholder proposals under Exchange Act Rule 14a-8 for the current proxy season. Due to resource constraints resulting from a backlog from the recent government shutdown and a large body of existing SEC guidance, the SEC will not express its views on no-action requests to exclude shareholder proposals, except for so-called precatory proposals that are based on state law (Rule 14a-8(i)(1)). This new policy will apply to the current proxy season, which runs from October 1, 2025, to September 30, 2026, as well as pending no-action requests submitted before October 1, 2025.
Commissioner Crenshaw dissented, cautioning that the process “effectively creates unqualified permission for companies to silence investor voices.”
Traditional Approach on Exclusion of Shareholder Proposals
Under Rule 14a-8(j), companies seeking to exclude a shareholder proposal must notify the SEC and the proponent at least 80 days before filing definitive proxy materials. Although the SEC is not required to respond to notifications of a company’s intent to exclude shareholder proposals, companies have traditionally sought no-action relief from SEC staff to confirm that exclusion is permissible under specific bases in Rule 14a-8. The SEC has, in turn, expressed its views on whether exclusion is appropriate.
New SEC Approach for the 2025-2026 Proxy Season
Exclusions Based on State Law
Under the new policy, the SEC will continue to review and provide feedback on no-action requests to exclude shareholder proposals under Rule 14a-8(i)(1), which covers proposals improper under state law. According to the SEC, unlike other bases of exclusion, there is a lack of sufficient existing guidance on Rule 14a-8(i) that merits the SEC’s continued review of these types of no-action requests. Until more guidance is available, the SEC will continue to evaluate these requests to ensure that companies and shareholders have access to staff perspectives on state law exclusions.
Other Bases for Exclusions
For exclusions not based on state law, the SEC will not express its views for this proxy season. Companies must still notify the SEC and the proponent at least 80 days before filing definitive proxy materials, as required by Rule 14a-8(j). If a company wants a formal SEC response, its notification must include an “unqualified representation” that it has a reasonable basis for exclusion, referencing Rule 14a-8, SEC guidance, or judicial decisions. The SEC’s response will state it does not object to the exclusion, but will not assess the adequacy of the representation or the merits of the exclusion. The SEC emphasized that a company’s notification should be limited to the information required by Rule 14a-8(j) and the unqualified representation itself.
Already Submitted Requests
If a company has already submitted a no-action request to exclude a shareholder proposal on a basis other than state law (Rule 14a-8(i)(1)) and now wishes to receive a formal response from the SEC, it should submit a supplemental notice that includes the required unqualified representation. In these cases, the timing of the original submission will be used to satisfy the 80-day notification requirement under Rule 14a-8(j).
Potential Implications of the New SEC Approach
The SEC’s refusal to substantively review exclusion of a shareholder proposal (other than on the basis of state law) is uncharted territory and could have a number of implications for companies and on the shareholder proposal landscape overall. While SEC no-action relief has always been non-binding, shareholder proponents may now resort to litigation or other avenues to have their voices heard, such as withhold vote campaigns.
In addition, the new SEC approach arguably places greater responsibility on companies and their counsel to ensure that exclusions are well-founded. Companies will now also need to weigh the legal risks and investor perception of excluding a proposal without the SEC’s substantive review, which may depend on the nature of the proposal to be excluded. Companies should also consider whether it is worthwhile to seek the SEC’s formal response (which will be non-substantive), given the need to provide an unqualified representation and, likely, an explanation for a company’s grounds for exclusion. Ultimately, the full impact of the SEC’s new approach is uncertain, and it remains to be seen whether the SEC extends this approach beyond the current proxy season once the backlog has subsided.